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EXHIBIT 10.2
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THE TJX COMPANIES, INC.
MANAGEMENT INCENTIVE PLAN
(AS AMENDED THROUGH JUNE 3, 1997)
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THE TJX COMPANIES, INC. MANAGEMENT INCENTIVE PLAN
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Table of Contents
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1. Purpose..............................................................1
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2. Definitions..........................................................1
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3. Effective Date.......................................................2
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4. Administration.......................................................2
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5. Eligibility..........................................................2
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6. Description of Awards................................................2
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7. Determination of Awards..............................................3
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8. Payment of Awards....................................................5
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9. Deferral of Award....................................................5
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10. Designation of Beneficiary...........................................5
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11. Notices..............................................................6
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12. Rights of Participants...............................................6
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13. No Employment Rights.................................................6
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14. Certain Payments Upon a Change of Control............................6
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15. Nonalienation of Award...............................................6
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16. Withholding Taxes....................................................7
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17. Termination, Amendment and Modification..............................7
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18. Headings and Captions................................................7
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19. Controlling Law......................................................7
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20. Miscellaneous Provisions.............................................7
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21. Awards to Certain Officers...........................................8
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THE TJX COMPANIES, INC.
MANAGEMENT INCENTIVE PLAN
1. Purpose
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The purpose of The TJX Companies, Inc. ("TJX") Management Incentive Plan
(the "Plan") is to provide officers and other employees who are key to the
annual growth and profitability of TJX with reward opportunities
commensurate with their performance relative to annual objectives.
2. Definitions
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Unless the context requires otherwise, the following expressions as used in
the Plan shall have the meanings ascribed to each below, it being
understood that masculine, feminine, and neuter pronouns are used
interchangeably, and that each comprehends the others.
(a) "Change of Control" shall have the meaning set forth in the Company's
1986 Stock Incentive Plan, as in effect from time to time.
(b) "Company" shall mean TJX and its subsidiaries.
(c) "E.C.C." shall mean the Executive Compensation Committee of the Board
of Directors of TJX. A member of the E.C.C. shall not be eligible to
participate in the Plan while serving as a member of the E.C.C. or one
year prior to becoming a member of the E.C.C.
(d) "Fiscal Year" shall mean the fifty-two or fifty-three week period
ending on the last Saturday in January, and commencing on the Sunday
following the last Saturday in January of the preceding calendar year.
(e) "Participant" shall mean any officer or other employee of TJX or any
subsidiary of TJX who is designated a Participant pursuant to Section
5 below.
(f) "Performance Criteria" shall mean the standards of measurement of
performance by the Company, performance by any division or subsidiary
of the Company, and/or individual performance for each Performance
Period as established by the E.C.C. pursuant to paragraph (a) of
Section 6 below.
(g) "Performance Goal" shall mean the level of performance with respect to
each Performance Criterion at which awards are payable pursuant to
this Plan.
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Performance Goals are established by the E.C.C. pursuant to paragraph
(b) of Section 6 below.
(h) "Performance Period" shall mean one Fiscal Year.
(i) "Section 162(m)" shall mean Section 162(m) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder.
3. Effective Date
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The effective date of the Plan shall be January 28, 1979. The effective
date of this amendment and restatement of the Plan shall be June 3, 1997.
4. Administration
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This Plan shall be administered by the E.C.C. The E.C.C. shall have full
authority to interpret the Plan; to establish, amend, and rescind rules for
carrying out the Plan; to administer the Plan; to determine the terms and
provisions of any agreements pertaining to the Plan; and to make all other
determinations necessary or advisable for its administration. The E.C.C.
shall not be bound to any standards of uniformity or similarity of action,
interpretation, or conduct in the discharge of its duties hereunder,
regardless of the apparent similarity of the matters coming before it. Its
determination shall be binding on all parties.
No member or former member of the E.C.C. or the Board of Directors of TJX
shall be liable for any action or determination made in good faith with
respect to the Plan or any award or payment made under the Plan.
5. Eligibility
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For each Performance Period, the E.C.C. shall designate those Participants
who may be entitled to receive annual management incentive awards, subject
to the terms and conditions of the Plan.
6. Description of Awards
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(a) Designation of Performance Criteria
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At the commencement of each Performance Period, the E.C.C. shall
determine the Performance Criteria for said Performance Period and the
relative weight to be given to each Performance Criterion. Performance
Criteria and the weighing thereof may vary by Participant and may be
different for different Performance Periods. Such Performance Criteria
may include, but shall not be limited to,
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measures such as pre-tax income, pre-tax income as a percentage of
sales, return on investment, or other measures specific to a
Participant's annual performance objectives. These criteria may be
based on Company, divisional, subsidiary and/or individual performance
as designated by the E.C.C.
(b) Performance Goals
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At the commencement of each Performance Period, the E.C.C. shall
determine a range of Performance Goals from minimum to target to
maximum for each Performance Criterion for said Performance Period,
based upon the Company, divisional or subsidiary Business Plan for
said Fiscal Year. Performance Goals are subject to the approval of the
President of TJX. Performance Goals may vary by Participant and may be
different for different Performance Periods.
At any time designated by the E.C.C. during a Performance Period or
thereafter, but prior to award payment, appropriate adjustments in the
Performance Goals may be made to avoid undue windfalls or hardships
due to external conditions outside the control of management, changes
in method of accounting, nonrecurring or abnormal items, or other
matters as the E.C.C. shall, in its sole discretion, determine.
(c) Award Opportunity
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At the commencement of each Performance Period, the E.C.C. shall
assign to each Participant the minimum, target and maximum opportunity
to be earned for said Performance Period, based upon the Participant's
position and ability to affect annual performance relative to goals
during the Performance Period. Award opportunity may be expressed as a
fixed amount or as a percentage of the Participant's actual base
salary earned for the Performance Period.
From time to time, discretionary awards, in addition to the annual
management incentive awards, may be made by the E.C.C. to any
Participant in recognition of outstanding performance or extraordinary
circumstances which occur during the Performance Period.
Recommendations of Participants to receive discretionary awards shall
be made by the President of TJX.
7. Determination of Awards
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(a) Upon completion of each Performance Period and certification of the
Company's financial statements by the Company's independent public
accountants for the Fiscal Year included in such Performance Period,
the E.C.C. shall review performance relative to Performance Goals, as
adjusted from time to time in accordance with paragraph (b) of Section
6 above, and
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determine the value of the awards for each Performance Period, subject
to the approval of the President of TJX and/or the Chairman of the
E.C.C.
Achievement of Performance Goals shall result in payment of the target
award. Failure to achieve Performance Goals will result in a decrease
or elimination of the Participant's award. Exceeding Performance Goals
will result in an increased award.
Performance Goal awards may be adjusted upward or downward by the
E.C.C. due to special circumstances or individual performance review.
Without limiting the generality of the foregoing, the E.C.C. may
reduce or eliminate awards to Participants receiving "Needs
Improvement" performance ratings.
(b) If an employee becomes a Participant after the beginning of a
Performance Period, the award payable to him or her shall be prorated
in accordance with the portion of the Performance Period in which he
or she is a Participant.
(c) In the event of termination of employment of a Participant for any
reason prior to the last day of the Performance Period, a Participant
thereafter shall have no further rights under the Plan and shall not
be entitled to payment of any award.
If termination of employment occurs (i) by reason of death, (ii) by
reason of normal retirement under a retirement plan of the Company, or
(iii) with the consent of the Company, the E.C.C. may, in its sole
discretion, value and direct that all or some portion of the award be
deemed earned and payable, taking into account the duration of
employment during the Performance Period, the Participant's
performance, and other matters as the E.C.C. shall deem appropriate.
In the event of termination of employment for cause, as defined and
determined by the E.C.C. in its sole discretion, no payment shall be
made with regard to any prior or current Performance Period.
(d) If a Participant shall be actively employed by the Company less than a
full Performance Period because of an accident or illness but
completes 26 weeks of active employment during said Performance
Period, the award otherwise payable to said Participant for said
Performance Period shall not be reduced because of a failure of active
employment due to such accident or illness.
If a Participant shall be actively employed by the Company less than a
full Performance Period because of an accident or illness and does not
complete 26 weeks of active employment during said Performance period,
said Participant shall receive such award, if any, for said
Performance Period as the E.C.C. shall determine.
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Any time for which a Participant receives sick leave and/or vacation
payments shall be deemed active employment time. Any time for which a
Participant received short-term income protection, short-term
disability and/or long-term disability payments shall not be deemed
active employment time.
The provisions in this Section 7 are subject to the terms of any
employment agreement, severance agreement or severance plan applicable
to any one or more participants and in the event of any conflict, such
terms shall control payment.
8. Payment of Awards
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As soon as practicable after valuation of the award for each Performance
Period, payment shall be made in cash with respect to the award earned by
each Participant.
9. Deferral of Award
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Participants who are designated by the E.C.C. as being eligible to
participate in the TJX General Deferred Compensation Plan may elect to
defer all or a portion of their awards in accordance with the terms of such
General Deferred Compensation Plan.
10. Designation of Beneficiary
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(a) Subject to applicable law, each Participant shall have the right to
file with the E.C.C., to the attention of the Vice President, Human
Services Director of TJX, a written designation of one or more persons
as the beneficiary(ies) who shall be entitled to receive the amount,
if any, payable under the Plan upon his or her death. A Participant
may from time to time revoke or change his or her beneficiary by
filing a new designation with the E.C.C. The last such designation
received by the E.C.C. shall be controlling, provided, however, that
not designation change or revocation thereof shall be effective unless
received by the E.C.C. prior to the Participant's death and in no
event shall it be effective as of date prior to receipt.
(b) If no such beneficiary designation is in effect at the time of a
Participant's death, or if no designated beneficiary survives the
Participant, or if such designation conflicts with law, the payment of
the amount, if any, payable under the Plan upon his or her death shall
be made to the Participant's estate. If the E.C.C. is in doubt as to
the right of any person to receive any amount, the E.C.C. may retain
such amount, without liability for any interest thereon, until the
rights thereto are determined, or the E.C.C. may pay such amount into
any court of appropriate jurisdiction, and such payment shall be a
complete discharge of the liability of the Plan, the Company, and the
E.C.C. therefor.
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11. Notices
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Each Participant whose employment relationship with the Company has
terminated, either voluntarily or involuntarily, shall be responsible for
furnishing the Vice President, Human Services Director of TJX, with the
current and proper address for the mailing of notices and the delivery of
agreements and payments. Any notice required or permitted to be given shall
be deemed given if directed to the person to whom addressed at such address
and mailed by regular United States mail, first-class and prepaid. If any
item mailed to such address is returned as undeliverable to the addressee,
mailing shall be suspended until the Participant furnishes the proper
address.
12. Rights of Participants
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Nothing contained in the Plan and no action taken pursuant to the Plan
shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Participant or his or her legal
representative or designated beneficiary, or other persons.
If and to the extent that any Participant or his or her legal
representative or designated beneficiary, as the case may be, acquires a
right to receive any payment from the Company pursuant to the Plan, such
right shall be no greater than the right of an unsecured general creditor
of the Company.
13. No Employment Rights
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Nothing in this Plan or any other document describing or referring to this
Plan shall be deemed to confer on any Participant the right to continue in
the employ of the Company or his or her respective employer or affect the
right of such employer to terminate the employment of any such person with
or without cause.
14. Certain Payments Upon a Change of Control
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If, upon a Change of Control of TJX, amounts payable or that would or might
be payable in respect of an individual under the Plan instead are paid to
such individual or his or her estate or beneficiary pursuant to any change
of control severance plan or agreement, or any similar plan, agreement or
arrangement, to which the Company is a party, payments in respect of such
individual hereunder shall be reduced PRO TANTO.
15. Nonalienation of Award
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No amounts or other rights under the Plan shall be sold, transferred,
assigned, pledged, or otherwise disposed of or encumbered by a Participant,
except as provided herein,
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and shall not be subject to attachment, garnishment, execution, or other
creditor's processes.
16. Withholding Taxes
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The Company shall have the right to deduct withholding taxes from any
payments made pursuant to the Plan, or make such other provisions as it
deems necessary or appropriate to satisfy its obligations to withhold
federal, state, or local income or other taxes incurred by reason of
payments pursuant to the Plan.
17. Termination, Amendment and Modification
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The E.C.C. or the Board of Directors of TJX may from time to time amend,
modify, or discontinue the Plan or any provision hereof. No amendment to or
discontinuance or termination of the Plan, shall, without the written
consent of the Participant, adversely affect any rights of such Participant
that have vested. This Plan shall continue until terminated by the E.C.C.
or the Board of Directors of TJX.
18. Headings and Captions
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The headings and captions herein are provided for reference and convenience
only, shall not be considered part of the Plan, and shall not be employed
in the construction of the Plan.
19. Controlling Law
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This Plan shall be construed and enforced according to the laws of the
Commonwealth of Massachusetts, to the extent not preempted by Federal law,
which shall otherwise control.
20. Miscellaneous Provisions
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(a) All costs and expenses involved in administering the Plan as provided
herein, or incident thereto, shall be borne by the Company.
(b) The E.C.C. may, in its sole discretion, reduce or eliminate awards
granted or money payable to any Participant or all Participants if it
determines that such awards or payment may cause the Company to
violate any applicable law, regulation, controls, or guidelines. Such
reduction or elimination may be made notwithstanding that the possible
violation might be eliminated by reducing or not increasing
compensation or benefits of other associates, it being the intent of
the Plan not to inhibit the discretion of the Company to provide such
forms and amounts of compensation and benefits to employees as it
deems advisable.
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21. Awards to Certain Officers
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The provisions of this Section 21 shall apply, notwithstanding any other
provision of the Plan to the contrary, in the case of any award made to a
person expected to be described in Section 162(m) at the time the award is
to be paid, as determined by the E.C.C. at the time of the award. In the
case of any such award: (a) Performance Criteria shall be based on any one
or more of the following (on a consolidated, divisional, line of business,
geographical or area of executive's responsibilities basis): one or more
items of or within (i) sales, revenues, assets or expenses; (ii) earnings,
income or margins, before or after deduction for all or any portion of
interest, taxes, depreciation, or amortization, whether or not on a
continuing operations and aggregate or per share basis; (iii) return on
investment, capital, assets, sales or revenues; and (iv) stock price; (b)
the specific Performance Criteria established by the E.C.C. with respect to
any award shall be subject to mandatory adjustment for any change in law
(including tax laws and statutory rates), regulations and interpretations
occurring after the grant date affecting such divisional pre-tax earnings
by more than one (1%) percent; (c) the maximum amount payable under any
Plan award to any such individual shall be $2,000,000; (d) no payment shall
be made under the award unless the applicable Performance Goals, which
shall have been preestablished within the meaning of Section 162(m), have
been met, nor shall any such payment be made until the E.C.C. certifies in
accordance with Section 162(m) that such Goals have been met; and (e) those
provisions of the Plan generally applicable to awards hereunder which give
to the E.C.C. or any other person discretion to modify the award after the
establishment and grant of the award, or which if applied to an award
described in this Section 21 might otherwise cause such award to fail to
qualify as a performance-based award under Section 162(m) shall be deemed
inapplicable to the extent (but only to the extent) the retention of such
discretion by such person or the application of such provision would be
deemed inconsistent with qualification of the award as performance-based
under Section 162(m).
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